V11.03: Mid-Year Terminations - The Exit Interview

It is the responsibility of the employee/participant to verify the benefits eligibility period and claims filing deadline if they terminate employment and/or participation during the year.

The claim filing deadlines, benefit eligibility periods and other issues that occur if participation terminates mid-year is clearly defined “up front” in the Summary Plan Description, in the enrollment brochures, handout materials and on our website www.FlexToday.com, etc. Similar information is also provided in their online accounts on myflexonline.com (Help and View Account Details).

We suggest that the employer include information on the “disposition” of their benefits during the exit interview if an individual terminates employment, becomes ineligible or terminates participation during the year. This is just a suggestion and would be considered a courtesy provided to the individual. However it may be difficult if not impossible for the employer to provide benefit information in an “exit interview” situation, thus this should be considered a courtesy, not a requirement.

The following are examples of wording regarding some of our standard benefit options that the employer can choose to include in the “package” of materials that is provided to former employees/participants. The ”***” indicates your actual claims filing deadline, which will usually be either 60-days or 90-days, depending upon your plan design.

FLEX PLAN – MEDICAL SPENDING / MED-FSA
If you terminate employment or participation during the year, you must submit claims for reimbursement within *** days after your date of termination for expenses incurred up to your termination date. If you are eligible to continue your Med-FSA participation under COBRA and you elect and pay the COBRA premiums for the Med-FSA, you will have *** days after your COBRA participation ends to submit your claims for expenses incurred up to the date your Med-FSA COBRA coverage ends.

FLEX PLAN – DEPENDENT “DAY CARE” / DCAP
If you offer the full-year for claims for day care:
   If you are no longer a Participant in the Plan (due to termination or any other reason), you may continue to be reimbursed for qualifying expenses from your Dependent Care Assistance Account through the end of the Plan Year or grace period if applicable.
If you do not offer the full-year for claims for day care:   If you terminate employment or participation during the year, you must submit claims for reimbursement within *** days after your date of termination for expenses incurred up to your termination date.

HEALTH REIMBURSEMENT ARRANGEMENT - HRA
If you terminate employment or if your eligibility for this benefit end during the year, you must submit claims for reimbursement within *** days after your date of termination for expenses incurred up to your termination date. If you elect to continue your HRA participation under COBRA and pay the COBRA premiums for the HRA, your participation in the HRA will continue and benefits will accrue as any other actively employed participant, subject to the usual claims filing deadlines. If your COBRA coverage is terminated for any reason, you will have *** days after your COBRA participation ends to submit your claims for expenses incurred up to the date your COBRA participation ends.

COMMUTER CHOICE – MASS-TRANSIT/VANPOOL AND/OR PARKING
You can only be reimbursed for expenses incurred (services received and paid) while you are an Active Participant and the expenses are subject to the monthly limits in effect for that period. Any expenses claimed in excess of those amounts cannot be considered or reimbursed. You can only be reimbursed up to the limit of the funds available in your account(s). 

       The deadline to submit your Commuter Choice claims will be the earliest of:

  • 180-Days After The Expense  The IRS regulations require that all eligible expenses must be submitted for reimbursement within 180 days of the date of the expense. For example, if you pay for a bus pass in the month of June, you must submit your claim no later than November 28th (180 days from June 1st)
  • ***-Days After Termination    If you terminate employment or stop making contributions with each pay period, you will no longer be an Active Participant and you will have *** days to submit your claims for eligible expenses incurred through the date your employment or participation ended.
  • ***-Days After Year-End    While the Commuter Benefits can roll balances from month-to-month, you will have *** days after the year ends to submit your claims for eligible expenses incurred during the previous plan year.

This statement generally applies to all benefits:
To be reimbursed for an eligible expense, the expense must have been incurred (service actually received) during the Plan Year while you are or were an active Participant. You will not be reimbursed for any expenses that are not incurred (services received, not necessarily paid) in the Plan Year, incurred before or after you are eligible to participate in the Plan, attributable to a tax deduction you take in a prior taxable year, or covered, paid or reimbursed from any other source. Any amounts remaining in your account at the end of the Plan Year will be forfeited after all claims are paid. In addition, any balance remaining in your account on the date you terminate employment with the Company will be forfeited after all claims are paid.

A Note Regarding COBRA:
COBRA continuation coverage may not be available to all individuals, all employer groups or for all benefits or situations.

This blog is presented for the consideration of our clients and business associates.  It is not intended to be legal, accounting, tax or professional advice. This information is not directed to any specific situation or individual and we do not assume liability for the use of or reliance on this information.  FlexToday respects your privacy and will make every effort to preserve your privacy but we do not and will not assume responsibility or liability for the content or use of any information you choose to post to this blog.  The comments posted on this blog are not necessarily those of FlexToday, Inc. or its employees or representatives.   This is a brief version of our privacy policy. For more information on our privacy policy, please refer to our main website,
www.FlexToday.com.

Copyright 2011 FlexToday, Inc., All Rights Reserved

FlexToday, Inc.
www.FlexToday.com
Email: Flex (at) FlexToday.com
PH 800 995 5373 or 559 432 6800

 

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